Question: I’m worried about the proposed gainful employment regulations and how well my programs will stand up to the requirements. How can I prepare to track my projected program default rate to stay in compliance with these upcoming requirements?
Answer: To help keep you compliant with proposed gainful employment requirements — and support your default prevention efforts — USA Funds Borrower Connect™ can help you monitor your projected program default rate. Track and report your default rate by:
- Classification of Instructional Programs (CIP) code.
- Institutional cohort default rate.
USA Funds Borrower Connect uses information uploaded from loan servicers and other sources to automate borrower communication through telephone, letter and email campaigns to help improve your cohort default rate. Recent enhancements to the tool help you comply with gainful employment regulations. USA Funds Borrower Connect allows you to import the data from the National Student Loan Data System to see how well individual programs are performing, based on the number of borrowers enrolled in the program who are now in repayment.
An institution’s cohort default rate measures whether borrowers entering repayment are able to repay their loans successfully. Programs with a rate of borrowers defaulting at or above 30 percent will be considered failing, according to this new regulation. The U.S. Department of Education has indicated the proposed regulation would go into effect July 1, 2015.
This proposed regulation affects all for-profit institution programs, as well as certificate programs at all institutions. While not all programs are subject to compliance with the proposed regulation, it’s a best practice to monitor your cohort default rate at the program level to ensure your programs are leading to successful completion and employment.
NSLDS provides gainful employment information in a Gainful Employment Data Extract File Report (GENEX1). Institutions may make requests for this report on an ad-hoc basis.
Contact USA Funds® online or by calling (800) 766-0084 to learn more about USA Funds Borrower Connect, or about any of USA Funds’ default prevention tools and solutions.